Remember Albania: A Fairy Tale

Once upon a time there was a very poor country, tucked away on the Adriatic Sea, called Albania. Many people assumed it was poor because it had been a hard-core communist country, depending on government to regulate corruption and economic affairs. But in fact the benefits of capitalism, individualism, and entrepreneurial skills had penetrated its whole way of life, though not so deeply as they had its ex-communist neighbors.

As a result, there arose in the ranks of new entrepreneurs a man who sold people on the idea that they could make money the easy way, not by working for it but by putting their money to work—what little they had. They should invest it, he said, in a big profit-making scheme of his own invention. The people liked the word “profit,” they’d heard it was a good thing. So they invested, slowly at first, since it was their first experience with this kind of enterprise. But as they saw others making profits without putting in a day’s labor, they plunged en masse toward the promised rewards of his enterprise.

Suddenly, however, a panic swept the nation. The enterprise had collapsed without warning, taking their invested savings with it. Nobody knew what happened to the money. “Who has it? We want it back,” they hollered. But the money was gone. “It’s the government’s fault,” they decided. “It should have warned us. Now it’s got to get our profits back for us.” But the former communists who sat in the state hous...